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A 1·+9 4)) 1496 D, Wed Nov 25 5:50 PM Rachel Pierce a E Safari File Edit View History Bookmarks Window Help ezto.mheducation.com Ch10 HWw Managerial Accounting For Managers 2nd Edition Chapter 12 Problem Come-Clean Corporation Produces A Variety Of Cleaning Chegg.com Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 Rets per year. Costs associated with this level of production and sales are given below: ni Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing o Variable selling expense Fixed selling expense $15 450,000 240,000 90,000 270,000 60,000 180,000 verhead 2 Total cost $43 $ 1,290,000 The Rets normally sell for $48 each. Fixed manufacturing overhead is constant at $270,000 per year within the range of 21,000 through 30,000 Rets per year. Required 1. Assume that due to a recession, Polaski Company expects to sell only 21,000 Rets through regular channels next year. A large retail chain has offered to purchase 9,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company would have to purchase a special machine to engrave the retail chain's name on the 9,000 units. This machine would cost $18,000. Polaski Company has no assurance that the retail chain will purchase additional units in the future. Determine the impact on profits next year if this special order is accepted et profit increases by $ 59,580

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A 1·+9 4)) 1496 D, Wed Nov 25 5:50 PM Rachel Pierce a E Safari File Edit View Hi

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